Labour Migration and Remittances in the Republic of Moldova (translation) March 14, 2004 Research team: Boris Ghencea and Gudumac Igor Labor migration and remittances in the Republic of Moldova. B.Ghencea and I.Gudumac The findings, interpretations, opinions and conclusions contained in this study report belong solely to the authors of the study and do not necessarily represent those of Moldova Microfinance Alliance and Soros Foundation Moldova. Marketing and Research Department Moldova Microfinance Alliance 16 Puşkin, str. tel. 22 99 03 22 99 04 Email: [email protected] [email protected] We bring our profound gratitude to all those who contributed to this study. Moldova Microfinance Alliance© 2 Moldova, Chisinau, 16 Puskin str. Tel.22 99 04, fax.22 99 02, email:[email protected] CONTENTS I. INTRODUCTION.................................................................................5 METHODOLOGY .........................................................................................................7 Problems and objectives of the study ........................................................................................................................... 7 Definitions................................................................................................................................................................... 8 Population and sample............................................................................................................................................... 11 LABOUR MIGRATION............................................................................................... 14 REMITTANCES........................................................................................................... 17 Remittances as an object of research .......................................................................................................................... 17 Theoretical and empirical references in analysing migration and remittances .............................................................. 18 Global flows of remittances ....................................................................................................................................... 20 Determinants of migration and remittances................................................................................................................ 21 IMPACT OF MIGRATION AND REMITTANCES..................................................23 Target country ........................................................................................................................................................... 23 Migration effects upon the migrants’ countries of origin............................................................................................. 23 MANAGEMENT OF MIGRATION...........................................................................29 TRANSFER SERVICES: FORMAL AND INFORMAL............................................32 REMITTANCES UTILIZATION PATTERNS .........................................................33 REMITTANCES AND MICROFINANCE ................................................................35 II. FINDINGS, ANALYSES, INTERPRETATIONS..............................37 THE REPUBLIC OF MOLDOVA – IN FIGURES....................................................38 Socio-economic picture.............................................................................................................................................. 38 Reflections in local massmedia ................................................................................................................................... 39 Remittances as a substitute for the Foreign Direct Investments.................................................................................. 40 BREADTH AND DIRECTIONS OF MIGRATION ................................................. 41 How many have left? ................................................................................................................................................. 41 Where do they leave? ................................................................................................................................................. 42 Age categories of Moldovan migrants ........................................................................................................................ 45 SOCIO-ECONOMIC PROFILE OF MOLDOVAN MIGRANTS.............................46 Migrants’ level of education ....................................................................................................................................... 46 Ocupation - as a source of income (prior to migration) .............................................................................................. 46 Necessary resources for migration.............................................................................................................................. 47 Migration costs .......................................................................................................................................................... 48 Level of family well-being as a factor behind migration .............................................................................................. 48 MIGRATION................................................................................................................49 Target country entrance ............................................................................................................................................. 49 Living and working .................................................................................................................................................... 50 Entrance, residence and work legality......................................................................................................................... 51 LABOR AND RETRIBUTION .................................................................................54 How long does the migration last and which are the occupations of Moldovan migrants? .......................................... 54 Migrants’ monthly payment........................................................................................................................................ 55 Living and working conditions, security, health and food ........................................................................................... 57 REMITTANCES...........................................................................................................58 Inflows of remittances in the Republic of Moldova.................................................................................................... 58 Remittance channels .................................................................................................................................................. 58 Remittance source-countries ...................................................................................................................................... 59 Remittances and labor migration duration.................................................................................................................. 60 Ocupation and remittances ........................................................................................................................................ 61 Other factors ............................................................................................................................................................. 61 Labor migration and remittances in the Republic of Moldova. B.Ghencea and I.Gudumac Transfer costs ............................................................................................................................................................ 61 UTILIZATION OF REMITTANCES.........................................................................63 IMPACT OF REMITTANCES ....................................................................................65 Migration, remittances and entrepreneurship.............................................................................................................. 65 Per capita incomes prior and post migration............................................................................................................... 66 Migrants’ contribution to their families ...................................................................................................................... 66 What are the migrants’ families’ achievements as the outcome of migration?.............................................................. 67 Social consequences of labour migration .................................................................................................................... 68 SYNOPSIS.....................................................................................................................70 Breadth and geography of labor migration in the Republic of Moldova ...................................................................... 70 The migrants’ profile.................................................................................................................................................. 71 Migration................................................................................................................................................................... 72 Migrants’ occupations in the target countries.............................................................................................................